A governor's perspective on the trade - Wisconsin governor Tommy G. Thompson

Business America, May 6, 1991 by Tommy G. Thomposn

Governor Thompson, chairman of the National Governor's Association Committee on International Trade and Foreign Relations, gives a state perspective on international trade promotion-an activity in which state governments are assuming a greater role.

American governors consider two of their most vital tasks to be broadening their state's economic base and providing opportunities for their citizens. Thus, governors have led efforts to guide stimulate economic development and job creation for more than 20 years. As the world has become smaller, so governors' economic development strategies have become more far-reaching. Now that economic opportunities are more international in scope, governors' efforts must extend beyond state and national borders.

One reason why governors have become more active in promoting trade and investment is that we are trying to cope with recent and ongoing changes in the economy. For most of our history, U.S. economic strength was based largely on access to natural resources, inexpensive transportation, large-scale production, a high-caliber work force, and sheer size of market. In each of these areas, the United States had advantages over its competitors.

No longer does the United States hold unchallenged leadership in technology, manufacturing, finance, and transportation. Today, more products require manufacturing know-how and specialized skills and services rather than plentiful natural resources.

Today, our competitors have thriving economies. Trading blocs of countries with consistent trade policies are being formed. World manufacturing output is shifting in nature and location. The pace of technological change is accelerating. Successful businesses will need to anticipate and adapt quickly to all of these changes.

Over the past two decades, there has been extraordinary growth and innovation in the states' international programs. State leadership can help shape and coordinate an effective trade strategy that responds to the diversity within the world marketplace.

States operate within a national economic and foreign policy framework provided at the federal level. Although the federal government sets the rules on trade, state governments are in a unique position to help companies develop and expand overseas markets. States can take initiatives at the microeconomic level that sheer size precludes from effective federal action.

Governors' Policy Tools

Governors have a number of tools they can use in international development. They include: trade and investment promotion, education and workforce training, infrastructure, and promotion of research and technological innovation.

Trade and Investment Promotion. Increasingly, nearly all business is conducted on a global basis. Successful companies understand their industry internationally and implement strategic plans to establish and maintain a world market position. Like businesses, states can take a strategic view of world markets.

State programs promote joint ventures and seek foreign investment. States provide technical assistance, including seminars, individual counseling, and the dissemination of trade leads. States promote international tourism through state advertising campaigns and tourism-oriented trade missions. States have their own export finance programs or offer information on non-state sources of financing. Last year, 44 states maintained 158 offices in 27 different countries.

Governors are involved in these efforts personally, and they have been successful in opening doors to trade and improving relations with other countries. Governors made 82 trips abroad last year, which along with other state efforts have helped position their states in the world marketplace.

Thirty years ago, overseas trade missions led by governors were rare. Today, governors' overseas travel is an important part of state economic development programs to increase exports to other countries, encourage foreign investment, and induce tourists from other countries to visit their states. Because of the heavy involvement of government in business decisions in many countries, it frequently takes a governor to open doors and to obtain the leads for future opportunities.

Education and Workforce Training. When it comes to adapting the U.S. education system to respond to changes in the economy, governors have played the leading role. We have worked hard to help prepare our citizens for the workplace of tomorrow by giving greater attention to the education needs of our children today.

Governor Terry E. Branstad of Iowa, chairman of the National Governors' Association, has made education a key component of this year's National Governors' Association (NGA) agenda, "Consensus for Change." Our two-day education summit with the President last September received worldwide attention and was an historic gathering.

International education-emphasizing foreign languages, geography, and cultural awareness-has been a critical part of this reform. That is why most states are taking steps to improve cultural awareness, language training, and teacher training programs and are encouraging the private sector to work more closely with schools and universities to improve international education. Improvements in the education system at all levels also have focused on the fact that workers of tomorrow must be technologically literate, with a better grasp of mathematics, science, and computer skills.